Can Scotland have an independent banking system?

A Scottish Currency in an Independent Scotland

Olanna — Sat, 06 Nov 2021 18:55:18 +0000

A Scottish Currency in an Independent Scotland Olanna Sat, 11/06/2021 - 18:55

Author or Creator

Yes Southside Dr Tim Rideout

Prediction for potential Scottish currency after Independence.

Scottish salaries will be paid in Scottish Pound. There will be a Scottish State Pension. Scotland will no longer be attached to the Bank of England. Scotland will have a Reserve Bank. Shops will trade in Scottish Pound. Zoom Video 1 Hour 30 mins.

Sources and Links

https://fb.watch/96rn2UkfKq/

Keywords

Currency

Pensions

Scottish Reserve Bank

The need for an independent banking system

Stephen Richard — Sun, 17 Oct 2021 07:52:45 +0000

The need for an independent banking system Stephen Richard Sun, 10/17/2021 - 08:52

Author or Creator

Scottish Independence Commission

With independence Scotland will need to set-up a banking system, but it should be done in a way that minimises risk to both the Scottish people and the Scottish economy. Independence is an opportunity to redesign the banking system to protect Scottish citizens from the economic fallout of a banking crisis. A Scottish central bank will need to be set up early in the independence transition process to oversee the creation of a new Scottish currency and to be the competent authority providing regulatory oversight of the banking system.

Several concurrent activities would then follow to deliver the new banking system:

Issuing Scottish banking licences and creating a commercial banking system;
Setting up a Scottish Payments System.
Creating a Scottish Universal Bank Account for all people in Scotland to provide the resilience that is missing in the UK banking system

Scottish Independence Convention (SIC) Transition Paper No.4 Banking

Keywords

banking

Central bank

Banking services

Let’s get Scotland’s banking right

Stephen Richard — Mon, 11 Oct 2021 07:55:03 +0000

Let’s get Scotland’s banking right

Primary Author or Creator

Common Weal

Stephen Richard Mon, 10/11/2021 - 08:55

Alternative Published Date

2021

Category

Banking

Type of Resource

Video

Length (Pages, words, minutes etc...)

2minutes

Fast Facts

Policies to get banking oriented to customer benefit rather than profit. Pointers on how to establish and run a Scottish Central Bank.

Resource Address (URL)

https://commonweal.scot/big-ideas/lets-get-scotlands-banking-right/

Keywords

banking

Central banking

Scottish Central Bank

Language English

SETTING UP A SCOTTISH BANKING SYSTEM

Stephen Richard — Fri, 01 Oct 2021 11:44:52 +0000

SETTING UP A SCOTTISH BANKING SYSTEM

Primary Author or Creator

Peter Ryan

Stephen Richard Fri, 10/01/2021 - 12:44

Additional Author(s) / Creators

Scottish Independence Convention

Alternative Published Date

2020

Category

Banking

Type of Resource

Policy Paper

Length (Pages, words, minutes etc...)

10pp

Fast Facts

A Scottish central bank will need to be set up to oversee the creation of a new Scottish currency. It will be the competent authority providing regulatory oversight of the banking system.

More details

Several concurrent activities would then follow to deliver the new banking system:

Issuing Scottish banking licences and creating a commercial banking system;
Setting up a Scottish Payments System.
Creating a Scottish Universal Bank Account for all people in Scotland to provide the resilience that is missing in the UK banking system

Scottish Independence Convention (SIC) Transition Paper No.4 Banking

Resource Address (URL)

https://independenceconvention.scot/wp-content/uploads/2021/04/SIC-Transition-P…

Keywords

Language English

Let’s get Scotland’s banking right

Stephen Richard — Tue, 14 Sep 2021 08:33:51 +0000

Let’s get Scotland’s banking right

Primary Author or Creator

Common Weal

Stephen Richard Tue, 09/14/2021 - 09:33

Alternative Published Date

2020

Category

Banking

Type of Resource

Video

Fast Facts

Banking has lost its way, forgetting that it should be serving its customers and not exploiting them. But a mutually-owned People’s Bank can change this.

Video: 2:09 minutes

More details

Banking has lost its way, forgetting that it should be serving its customers and not exploiting them. But it’s not just the way banks operate, it’s whether people can even get access to proper banking with more and more branches closing. Common Weal believes both can be fixed with a mutually-owned People’s Bank. How this would be done is explained in the report Better Banking which proposes using an existing ‘bank in a box’ model. This is a preprepared model for a banking network which would initially be set up by government but would then be passed into the ownership of its customers. It has a full business plan and it would be able to open branches (or mini-branches via a ‘banking pod’ model) in any community where enough people joined the bank. It is particularly designed not to make profit from customers and to emphasise long-term, trusting relationships. These are particularly important to small businesses.

The other big banking policy Common Weal published was for a Scottish National Investment Bank – and this has already happened. It was conceived of as a way of driving investment into big Scottish businesses and other projects with a public-good focus. It would emphasise mission-orientated investment to achieve social and environmental goals as well as economic ones and would specialise in providing the kind of long-term, patient investment based on trust that the commercial banking sector has not provided. We published two reports, the first making the case for the bank and the second setting out the technical detail of how that would work.

We’ve done a number of other pieces of work on banks and banking. There is more information on our work on a central bank for an independent Scotland in the Big Idea ‘Getting Scottish Independence Right’. But we also published a proposal for how Scotland could set up its own digital currency under independence. We also produced an important report on how Scotland could set up a publicly owned payment service (like the way you pay for things at tills using cards or your phone) which would both be reliable and safe (and not harvest your data) and would also create income to help fund public services.

Video is 2:09 minutes

Resource Address (URL)

https://commonweal.scot/big-ideas/lets-get-scotlands-banking-right/

Keywords

Bank services

Scottish National Investment Bank

Currency

Language English

Paying Our Way: The Case For A Scottish Payment System

Stephen Richard — Sat, 04 Sep 2021 16:33:18 +0000

Paying Our Way: The Case For A Scottish Payment System

Primary Author or Creator

Peter Ryan

Stephen Richard Sat, 09/04/2021 - 17:33

Additional Author(s) / Creators

Common Weal

Date Published

Sat, 04/13/2019 - 12:00

Category

How will citizenship be determined?

Type of Resource

Policy Paper

Fast Facts

Considering only the retail sector, £80 million is removed from the Scottish economy each year in the form of transaction charges skimmed from ATM withdrawals, debit/credit card payments and other forms of transaction like Paypal and internet transfers.

Scottish local authorities could set up a network publicly owned, not-for-profit payment system which would reduce fees for banks, businesses and consumers as well as ensuring that more money is injected back into local economies. Using the payments system for transfers within the public system would save the Scottish government a substantial amount which could be spend on more and better public services.

A secondary effect of this national payment infrastructure would be to make it significantly easier for an independent Scotland to launch its own currency.

More details

Imagine you and I are an economy of two people. I pay you £100 in cash for goods. You, in turn, pay me £100 for services. Our economy ticks along just nicely exchanging goods and services with the cash transferring between us.

But now imagine that every time we pay each other, we have to do it via some third party who takes a cut from every payment. Every time we pay each other a little money, even if it is just two or five percent, vanishes from our economy meaning that we trade fewer goods and services between ourselves. We don’t need to imagine this. This is what happens every time we make a transaction via a credit or debit card or if we pay via an electronic transfer like Paypal or Apple Pay. Even if we withdraw cash from an ATM – even if that ATM is one of the increasingly rare ones that don’t charge us directly for accessing our own cash – then our bank pays a fee. It is estimated that in the Scottish retail sector, around £80 million per year is removed from transactions in fees.

All of these little slices of transaction fees skim money out of our economy. When the fees are being levied by a multi-national company – especially one which prides itself on “tax-efficient accounting” – that money can leave Scotland altogether.

Scottish small and medium businesses are the ones who suffer most here. They are least able to bear the ever-increasing fees that they have to pay on each and every one of their transactions.

Scotland is not yet ready to move to a completely cash-free society. Even though card payments overtook cash payments in 2017, there’s a long way to go before notes and coins disappear – if they ever do.

Whether this happens or not, there is scope for Scotland to introduce its own publicly-owned Scottish Payment Service which would be run by local authorities on a not-for-profit basis. This would allow money to be injected back into Scottish local economies or used to level the playing field between small businesses and larger corporations. The Payment System may also be set up such that it would enable Scottish businesses to provide cash services in a more efficient way than current “cashback” systems and to strengthen Scottish economies struggling due to the loss of local bank branches and ATM services. If current fees are halved then across the retail sector alone, this would represent an injection of around £40 million per year into the Scottish economy.

Finally, whilst this policy idea is possible under the current powers of devolution and is a worthy idea in and of itself, the prospect of a national payments infrastructure opens up the possibility of positive consequences for Scottish independence and the launch of a prospective Scottish currency. If the payments infrastructure is already in place and operational by the time of independence (or even by the time of an independence referendum) then it would greatly simplfy the task of adapting digital payments systems to cope with the new currency. A Scottish currency could be launched through the payments system in short order and could be used by Scottish consumers well ahead of the launch of any physical notes and coins. This would further incentivse private banks and other financial institutions to also support the new currency as the alternative – losing customers to the early adopters – would be a real prospect.

The Scottish government does not need to wait for independence to begin implementing a Scottish Payment Initiation Service. Under the Payment Services Regulation, we could start doing this now with the finance coming from the Scottish National Investment Bank. This investment would not only save the Scottish Government money but also help to transform our retail economy.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2019/04/Paying-Our-Way.pdf

Keywords

Cashless payments

Scottish payments system

Currency

Language English

An Investment-Led Economic Development Framework For An Independent Scotland

Stephen Richard — Sat, 04 Sep 2021 16:26:31 +0000

An Investment-Led Economic Development Framework For An Independent Scotland

Primary Author or Creator

Common Weal

Stephen Richard Sat, 09/04/2021 - 17:26

Date Published

Thu, 04/18/2019 - 12:00

Category

Economy

Type of Resource

Policy Paper

Fast Facts

he UK’s model of economic development is based on a unproductive sectors which generate vast profits through four particular methods – financial speculation, asset value inflation, debt-fuelled consumption, and concentration and monopoly.

This report argues that Scotland, if independent, could improve its performance across 12 key pillars of its economy.

It then explores 18 alternative economic theories – beyond limited approaches focused on GDP growth and from there creates a package of 10 actions which would move an independent Scotland towards an investment-led economy including laying down the foundations of a Green New Deal proposal.

More details

The report lays out ten packages of actions that Scotland could undertake – some of which could be started now, many of which would require independence – that would help move to an investment-led economy. Whilst this report is not in itself a prospectus for a Scottish “Green New Deal” these packages are all compatible with and would form the foundation of such a Green Deal.

The plans of action are:

Create a monetary and fiscal environment conducive to investment. During the development phase of Scotland’s independence, it will be recognised that an independent currency and strong monetary institutions are vital and that cutting deficits suppresses the economy and pushes deficits onto private and household sectors.
Strengthen the foundational economy. Scotland should prioritise core public needs such as energy, transport, infrastructure, and postal and communication services and should tackle growing problems in housing and food sectors with a much more interventionalist approach.
Build a public investment model. Led by the Scottish National Investment Bank, Scotland should set up a series of National Companies tasked with driving investment in a strategic way across public, civic and private sectors. A public stock exchange would support businesses seeking equity and local banking networks would support small and local businesses.
Produce an industrial strategy. Scotland’s industrial strategy would be designed to boost, develop and stimulate the productive economy and rebalance away from low-pay sectors. Key also would be anchoring strategies to maintain businesses in Scotland for the long term.
Invest in human capital. From industrial democracy and collective bargaining, through workers’ rights and social security, a Universal Basic Income and more recognition of unpaid labour, encouraging entrepreneurialism and creating a welcoming immigration strategy not solely based on economic reasons there is much that Scotland could do to focus attention on how well we live in this country rather than just how much we produce for our employers.
Implement a resource management strategy. Scotland’s resources are vast but many are exploited unsustainably or are being used in ways which benefit too few. Much better use of our land and marine assets would be prioritised.
Decentralise economic policy. Though not on anywhere near the magnitude of the UK as a whole, Scotland still suffers from regional economic inequalities. Development Councils – a radical form of local government – would be used to boost local ownership of development policy and help to stop over-concentration of economic activity within Scotland.
Reorient business support. Scotland should take a more strategic, value based approach to business support. Diversification of ownership models should be encouraged and the public sector should take an “entrepreneurial state” approach in many areas of the economy.
Do no harm. Scotland must take climate change seriously. Small tweaks to the current system or delaying action beyond the next election is no longer tenable. A Green New Deal should be developed and enacted. Instead of debt-fuelled consumption, a sharing economy with a much more circular approach should be built. “Reduce, repair, re-use and recycle” should replace “take, make, use and dump”.
Start with a boost. Setting up a new country will take a lot of work and will require a large sum of money invested to create the new services and infrastructure that Scotland currently lacks entirely or needs to vastly expand. A new country should not start life with a decade of deficit reduction at a time when the need for transformational investment will be at its more vital.

We believe that independence will be required to meet all of these goals and we believe that meeting these goals will be a reason to fight for independence. With these, we have created a vision of a Scotland to come which can not only meet the hopes and aspirations of its citizens but can bring them together in a shared enterprise of making all of our lives better.

Keywords

Universal Basic Income

Resource management

Economic policy

Language English

Submission on the Scottish National Investment Bank

Stephen Richard — Sat, 04 Sep 2021 16:17:23 +0000

Submission on the Scottish National Investment Bank

Primary Author or Creator

Common Weal

Stephen Richard Sat, 09/04/2021 - 17:17

Date Published

Fri, 05/10/2019 - 12:00

Category

Banking

Investment banks

National bank

Type of Resource

consultation response

Fast Facts

A Consultation Submission to the Scottish Parliament’s Economy, Energy and Fair Work Committee asked for expert submissions on the ongoing work to establish a Scottish National Investment Bank.

More details

― Common Weal sees the Scottish National Investment Bank as a long-term structural intervention into the Scottish economy. Its aim is to drive investment into the Scottish economy in ways which prioritise the public good and in particular in ways that support the long-term development of Scottish enterprises and ‘anchors’ them in the Scottish economy. It should also support the development of world-class public infrastructure, housing and energy infrastructure for Scotland. In time Common Weal believes the Bank should also support and coordinate a Scotland-wide system of local banking on a mutual or publicly-owned basis. This would both address the problem of declining access to banking services in many parts of Scotland and act as the primary financial support structure for small businesses (most small enterprises do not borrow money but rather rely on long-term relationships with local banking services).

― We envisage the Bank as a source of finance which is tailored to public-good outcomes, but the bank must operate on full cost recovery basis as a commercial bank would (but without extracting private profit). It must be mission-driven not only to ensure the public good aspect but also to comply with European Union competition laws. But it should not be the job of the Bank to seek to achieve public-good outcomes alone. Rather it should work with a range of ‘intermediate institutions’ which would stimulate demand and make strategic interventions, providing finance packages tailored to need in discussion with customers and stakeholders. Common Weal has already outlined proposals for a Scottish National Infrastructure Company (an adapted form of the Scottish Futures Trust which would let the Bank lead on funding packages and instead focus on best practice in infrastructure design and project management), a Scottish National Energy Company and Energy Development Agency (based on the Danish model and driving investment into a coordinated energy system on a strategically-planned basis) and a revised enterprise support network orientated around the bank. We will publish further work on other intermediate institutions such as a National Housing Company and a body to oversee a Scottish Green New Deal.

― In this model the bank would accept any applications for lending or equity investment. These might come directly from enterprises or projects or by negotiating appropriate lending packages with intermediate institutions which would market those to relevant customers. Any applications the Bank receives would then be assessed against a series of current ‘missions’ which would help to give a weighting to different applications based on an assessment of how well they align with the missions (and, in the initial stages at least, the available capital). For example, if two very similar applications were submitted, the Bank would prioritise the one which had a better profile on, for example, gender equality or efficient energy use – but it does not mean that both projects couldn’t be funded so long as both were judged not to be acting against the Bank’s missions. It is for the Bank to provide finance to applications which meet its criteria; it is for the intermediate institutions to stimulate demand and take a strategic approach to specific aspects of the economy.

― A fully-operating Bank would be able to raise capital from sources other than government (for example by attracting pension fund investment) and would be able to leverage that capital when lending or investing (we believe that a three-to-one capital liquidity ratio is sensible and cautious, enabling the bank to lend £3 for every £1 it holds in capitalisation). To be able to attract this kind of investment the Bank should aim to develop a balanced ‘loan book’. Lending to medium-sized enterprises can be comparatively high-risk. This can easily be off-set if the Bank ensures significant exposure to low-risk lending. There is very substantial scope for this in Scotland because of under-investment in public rental housing and energy infrastructure and also because of the need to replace current funding models for public infrastructure. If the Bank has a portfolio exposure which is 70 per cent housing, energy and public infrastructure (all of which is very low-risk) it will position it well to be able to take a greater risk in the 30 per cent of its lending which is to businesses, social enterprises and so on. This will make the Bank a very attractive investment opportunity for investors looking for reliable long-term returns (such as pension funds). There is every reason to believe that the Bank could be capable of meeting as much demand as emerges through this form of capitalisation and leverage – we believe total investments made could quickly reach the scale of tens of billions of pounds, contingent on demand.

― To ensure that a long-term approach is taken in the running of the Bank we have proposed that there should be a balanced governance structure. The Bank must be a corporate entity which has an independent Board which is wholly responsible for the Bank’s operation. It will be wholly owned by government and government may set broad strategic goals but government will not be able to instruct the Bank directly on its business practices. Governments can at times take a short-term approach as a result of electoral cycles and if left to financial administrators alone it would be easy for the public-good mission of the bank to get lost over time. To address both of these issues we proposed that the professionals who run the bank should receive advice from a second source to act as a balance to the role of government. We therefore proposed an advisory body which would be a tripartite stakeholder body representing customers (private and social enterprises), stakeholders (such as local authorities or housing associations) and representatives of public-good concerns (such as trade unions, environmental organisations and equalities groups). The Advisory Group would provide its advice directly to the Board of the Bank.

― To reach this vision will take some time. The major barrier is that there will need to be negotiations with both the UK Treasury and Bank of England (and potentially the European Union) to gain dispensations to make all this possible. Effectively the Scottish National Investment Bank needs to be treated in exactly the same way as RBS (which is majority publicly owned but the liabilities of which are not counted against public sector debt and it is exempt from ‘co-investment’ restrictions). Common Weal has confidence in the team which is setting the Bank up. Their view is that we will be in a stronger position to engage in these negotiations if the Bank is first able to demonstrate demand. We agree with this position and so are content with the broad thrust of the legislation and the approach being taken since it enables the first phase and does not restrict a second phase. However, we would like to see an ambitious development programme set for the Bank which would see it seeking to begin the above negotiations within two or three years of operation, enabling the Bank to approach the vision set out above within perhaps five or six years.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2019/05/EC-SNIB-submission.pdf

Keywords

Scottish National Investment Bank

Equity investment

Language English

Investment in Scotland: A Common Weal Approach

Stephen Richard — Tue, 31 Aug 2021 14:24:48 +0000

Investment in Scotland: A Common Weal Approach

Primary Author or Creator

Iain Cairns

Stephen Richard Tue, 08/31/2021 - 15:24

Additional Author(s) / Creators

Christine Cooper, Gordon Morgan, Common Weal

Alternative Published Date

Septtember 2014

Category

Banking

Type of Resource

Policy Paper

Fast Facts

― Taking a look at UK debt over the long-term shows that it is historically at a very low level. It is also incorrect to claim that we cannot afford the interest on debt.

― The reality is that there has rarely been a more favourable time for the UK Government to borrow in order to invest in renewing its infrastructure and fostering new industries.

― It is testament to the outright failure of the Thatcherite project – the deregulation and privatisation of much of the UK economy and the increasing emphasis placed on the financial sector – that the UK’s growth has declined every decade since the former Prime Minister began the process in the 1980s.

― The case of Private Finance Initiatives (PFI), which has dominated infrastructure investment since the 1990s, exemplifies how private finance provides poor value for money.

― The financial system in the UK, which by its nature, distributes wealth from the productive economy to the financial sector from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand.

― Investment is what the UK lacks, not money.

More details

The financial system in the UK, as this report has shown, which by its nature distributes wealth from the productive economy to the financial sector, from the indebted poor to the wealthy shareholders of banks and from regions to financial centres, is not capable of delivering the kinds of economic and social outcomes people have a right to demand. Moreover, it threatens to create a kind of‘perpetual state of crisis’which acts as a justification for the utterly destructive rounds of austerity to which all mainstream parties at Westminster have committed.

This report shows another way forward.

Governments and central banks must once again regard monetary policy as being about more than merely the quantity of money in an economy, which is supposedly controlled by the price of money (i.e. interest rates). Governments and central banks must also be concerned with the ‘quality’ of money in the economy, i.e. for what purposes the money is allocated, how it is allocated and what kind of institutions allocate it.

Central bank credit controls or guidance is a tried and tested method of improving productive investment while reducing speculation.

Also at the national level, a National Investment Bank should be the central component of a new and accountable financial architecture. But the financial sector must also be remodelled around democratically accountable, locally responsive banks and credit co-operatives, run by communities for communities.

Investment is what the UK lacks, not money.

Not only will this create stability in the financial sector. It will be a huge boost to the productive economy, including for co-ops and social enterprises which seek to put people before profit. It is self-evident that if we are to have an economy which is run in the interests of communities rather than shareholders, communities must be in control of directing the flow of financial resources towards their chosen outcomes.

Our current economy - characterised by low-skilled work, disempowered employees and enterprises concerned almost exclusively with profit - is to a large extent a reflection of the priorities of a financial sector which itself is dominated by the desire for profit above all else.

A Common Weal society needs a Common Weal financial sector. And considering the current debate about Scotland’s constitutional status, it is worthwhile emphasising that viewing monetary policy in these broader terms would allow Scotland, even without its own currency, to pursue its own independent monetary policy through the strategies outlined in this paper, which promote diversity in the financial sector.

Finally the austerity narrative must be challenged. The current rounds of austerity in the UK are justified neither by the level of debt nor the rate of interest paid on that debt, both of which are currently low by historical standards.

Investment is what the UK lacks, not money.

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2020/09/Investment-in-Scotland-A-Com…

Keywords

UK debt

UK Government Borrowing

Privatisation

Private Finance Initiative

Wealth

public investment

Profit

Language English

ScotPound: Digital Money for the Common Good

Stephen Richard — Tue, 31 Aug 2021 07:44:01 +0000

ScotPound: Digital Money for the Common Good

Primary Author or Creator

New Ecconomics Foundation

Stephen Richard Tue, 08/31/2021 - 08:44

Additional Author(s) / Creators

Common Weal,

Date Published

Wed, 09/02/2015 - 12:00

Category

Currency

Type of Resource

Policy Paper

Fast Facts

KEY POINTS

― Immediate economy boost: We propose a 250 ScotPound (S£) dividend be given to each Scottish citizen, increasing the overall purchasing power within the economy. The injection of funds would not add to the UK deficit and we estimate the payment infrastructure of the system would be low cost – in the region of £3 million – all at a time of austerity.

― Lower costs for business: A new payment system – ScotPay – would provide the world’s first publicly owned, not-for-profit national payment system, enabling Scottish businesses to accept payment for goods and services without being charged fees by banks and global credit card firms.

― Socially inclusive: The currency would be available to all, with mobile phones the main instrument for making payment via text message or on an app. For those unable or unwilling to use the technology, a voice recognition system would also be implemented to ensure inclusion.

― Leading by example: The project would demonstrate that a new national currency can be created and implemented. Successful implementation could significantly reduce the chances that any future debates about independence would be unduly influenced by the fear of losing sterling.

More details

Crucially, Scotland does not have to give up sterling in order to introduce its own new domestic digital currency. Such a new payment system could operate alongside sterling and provide social and economic benefits that complement the continued use of the UK’s national currency.

Money is one of humanity’s greatest inventions and a powerful social technology. But most people, despite using it every day, have never considered what money really is, how it works and its impact on society.

A growing group of innovators have realised the potential to change the design of money so that it better serves people and the planet. So far, most such schemes have been on a small scale, but developments in internet and mobile phone technology are offering new, bigger opportunities.

In the UK, 97% of new money is created by commercial banks in the form of interest-bearing debt - loans. Scotland, like the rest of the UK, would benefit from a pluralist monetary system that includes forms of money not based on bank debt creation to mitigate the worst consequences of the current system and create a more diverse and resilient economy.

This report outlines the creation of a new national digital currency, ScotPound, and free-at-point-of-use payment system, ScotPay, for Scotland. Our proposals draw on over two decades of research into top-down reform of existing national currency systems and bottom-up local and complementary currencies.

The new Scottish currency would be non-convertible and purely digital, operated through an arm’s length public enterprise – BancaAlba.

The introduction of such a scheme, even if relatively small-scale at first, would have a number of social and economic benefits:

1. An economic boost: We propose a 250 ScotPound (S£) dividend be given to each Scottish citizen, increasing the overall purchasing power within the economy. The injection of funds would not add to the UK deficit and we estimate the payment infrastructure of the system would be low cost – in the region of £3 million – all at a time of austerity.

2. Lower costs for business: A new payment system – ScotPay – would provide the world’s first publicly owned, not-for-profit national payment system, enabling Scottish businesses to accept payment for goods and services without being charged fees by banks and global credit card firms.

3. Socially inclusive: The currency would be available to all, with mobile phones the main instrument for making payment via text message or on an app. For those unable or unwilling to use the technology, a voice recognition system would also be implemented to ensure inclusion.

4. Leading by example: The project would demonstrate that a new national currency can be created and implemented. Successful implementation could significantly reduce the chances that any future debates about independence would be unduly influenced by the fear of losing sterling. The programme would improve understanding about how money works and its potential uses. Scotland would position itself as a world leader in financial innovation.

The specification and design of the ScotPound currency, the ScotPay public interest payment system, and the arm’s length public enterprise operator BancaAlba set out in this report are not final blueprints. In highlighting the huge economic and social potential of financial innovation, we hope that Scotland’s people and political parties will debate and consider such a scheme, with or without another independence referendum

Resource Address (URL)

https://commonweal.scot/wp-content/uploads/2015/09/ScotPound-Digital-Money-for-…

Keywords

Language English